Stock Reservation in Odoo Manufacturing

When it comes to Supply Chain Management, forecasting has a significant role to play. To any business, forecasting enables you to ensure that you or your company is equipped with enough supplies to meet the customer demand or customer satisfaction. With the implementation of ERP software, one can easily forecast the customer demands in advance that too for weeks and months.

Supply chain management is one of the strenuous tasks to accomplish. There is always an environment of constant pressure for the supply of goods and the company does everything to meet the needs of their customers.

Forecasting or estimation of goods is the first and foremost action triggered by any company. If the forecasting is not properly envisioned, it can cause great loss to the company.

Often with overestimation of customer demands, inventory gets bloated and results with high costs in warehouse maintenance and operations. The bulk inventory cause the company with additional expenses of labor charge and storage costs, as the workers have to move the additional goods to another storage area, making the way for new inventories. In case, if the business revolves around with perishable goods, the company loss is double. In such cases, the company infuses discounts for their goods, which reduces the company's profit margins and income.

Secondly, the underestimation of customer demands comes along with customer dissatisfaction and huge business loss. Suppose, in case suddenly the company receives a bulk or huge order and you find yourself with inventory shortage, the customers might cancel their order and give their business elsewhere leaving behind huge loss to your company. Therefore it’s not a wise decision not to forecast the right or adequate supply needed to meet any demand from the side of customers. Often the last minute rush in meeting the order results with higher supplier prices reducing the profit margins and net income of the company.

Therefore any supply chain management should be well equipped with a proper plan and design, and also an efficient mode of controlling and monitoring of goods and their supply.

Be it a small, medium or large scale enterprise, highly sophisticated tool like Open ERP/Odoo comes as rescue tool for managing your warehouses efficiently and helping your company to forecast and plan in advanced their inventory.

With the implementation of Odoo, the supply chain management becomes seamless, helping the process of forecasting and measuring the adequate amount of supply chain. Odoo helps in synchronizing the demand cycle with the facilitation of real-time information of inventory moves.

With Odoo ERP, one can customize the work order either via setting the work center or the mechanism of routing.

Here the user is embedded with the option of choosing a product from the list or create a new one. Followed by choosing the Bill of Material. The finished product tab will show the end-user the number of finished products. Later via clicking the option of “Check availability”, one can easily see the availability of raw materials in inventory.

Upon the confirmation of the manufacturing order, the company can start their production and Odoo helps to view the status of every ongoing manufacturing order.

Odoo also supports the negative inventory where the company can start the production even without ensuring the raw material availability.

The produce button is the option to start the production.

As you can see in the image, the option of “Post inventory” helps the company to update with their inventory movements for further course of actions. Note, here you can “unreserve” any raw material from manufacturing order to make it available to inventory.

Odoo’s advanced manufacturing order/ method comes with further configuring options like the settings such as Work Centers, Routing, Work Order management etc. The production order here describes the required amount of raw materials and complete operations held for a production stage of goods.

Odoo’s master production schedule (MPS) helps the manufacturing ERPindustries with their production of individual commodities. The Master Production Schedule translates the customer demand into a plan of action, scheduling the complete environment required for the production, such as allocation of raw materials and other resources. It also helps to avoid shortages in raw material supplies, curbing additional expenses and last minute scheduling. It helps in consolidating the schedules and thereby forecast any range of Bill of Material.

Here one can select the Sales Order, Start date and Delivery date to automate the make to order action. The routing option set here enables to track each sales order letting company’s supply chain management with real-time information of where each part of inventory should be at the corresponding particular time. Routing selection is provided at the time of Schedule generation.

Creation of Schedule Details

The Bill of Material encompasses the list of raw material needed to produce a product. So while creating a manufacturing order for a particular product, Odoo enables with the selection of corresponding BoM from the list. BoM thus helps to create the inventory updated during the manufacturing process.

Open ERP automatically completes the name of the bill of materials and the default unit of measure for a particular product. This helps you to reserve more raw materials for manufacture.

As the manufacturing process is not a single step process, but an involvement of different work centers, where each work centers has its own processes and processing time. Here, Odoo feature with adding the routing to the Bill of Materials for a particular product. Route defines the path a product must follow depending on the products, sales order lines or their warehouses. Each product has its own routes.

From the Odoo menu, we can set the order or route to each manufacturing. If the company has a different manufacturing process for the different product, Odoo also comes with an option of multiple routing.

Since the manufacturing order is based on BoM, the system thus follows the route specified in the BOM during the manufacturing process.

Below is the routing enabled manufacturing order.

Upon clicking “Check availability” button shown in the above image, the company can analyze the availability of raw materials to complete the manufacturing order and upon clicking the Work order button, the company can create work orders according to the routing and also the management of each work order separately.

One can also set the detailed working time for work centers. Time tracking options have the facilities to enter the information such as Planned Date, Effective Date, Real Time Duration and Expected Duration to complete an order. This helps in forecasting the demand-supply.

Odoo also allows the provision to create a stock reservation in the sales order. Before the confirmation of any quotation, Odoo initiates the option for reserving the stock for a particular quotation line. Via enabling the reservation option, the reserved quantity of products is removed from the virtual stock, bringing the virtual stock amount below the minimum. A new sales order can be generated by subtracting the reserved quantity from the virtual stock.

In Odoo the stock is reserved as soon as the sale order is confirmed and the delivery order has been checked for availability.

Hope this article was useful to the reader.If you are interested in implementing Odoo ERP for your business or to know more about the potentialities of Odoo kindly drop your message to info@cybrosys.com